Ethereum Tests 4000 Again: Is Capital Flowing In or Are the Sickles Already Sharpened?

The Pattern That Repeats

History doesn’t repeat, but it often rhymes. Since 2024 began, Ethereum has approached the 4000-point level four times now—each approach painting a different story in market sentiment. The first surge in March gave way to a 30% collapse within 40 days. May’s near-miss at 3980 preceded a devastating drop to 2112 in under three months. December’s triumphant run to 4109 set the stage for April’s free fall to 1384. The chain sickle has swung thrice already, leaving deep scars in portfolio statements.

Yet this fourth attempt carries different signals. The breakthrough coincided with a dramatic 24-hour trading volume surge to $80 billion—30% above previous peaks—suggesting genuine capital inflow rather than speculative frenzy. Current ETH price sits at $2.93K, with volatility reflecting the ongoing tension between bulls and bears.

The Technical Picture: Golden Cross Meets Divergence

The daily chart presents a mixed narrative. A golden cross formed when the 5-day moving average crossed above the 20-day, a traditionally bullish signal. However, the 10-day average lagged behind, hinting at potential top divergence. The MACD maintains bullish positioning, but the red bar heights have contracted compared to last week—classic signs of waning momentum.

On-chain data tells an even more nuanced story. Exchange balances dropped by 120,000 coins in seven days, superficially indicating accumulation. Yet large transfers exceeding 1000 coins spiked 40%, suggesting sophisticated players are taking profits. This divergence between whale behavior and retail sentiment mirrors the market’s internal conflict.

The Bull Case: Fundamentals Deserving Optimism

The bullish narrative rests on two pillars: technological progress and monetary tailwinds. Layer2’s total locked value has eclipsed $25 billion, reducing network congestion and transaction costs. Ethereum’s gas fees have plummeted 60% compared to the prior year, making transactions economical for everyday users.

Macro conditions appear supportive. Fed rate-cut expectations are rising, and institutional ETF inflows accelerated with $500 million added in just one week. These accumulating tail winds suggest institutional money is positioning for the next leg higher.

The Bear Rebuttal: History Rhyming Again

The opposition points to unmistakable echoes of 2021. A double-top pattern near 4000 mirrors the market peak of the last bull run—textbook technical weakness. Adding fuel to bearish concerns, the US SEC’s intensifying regulatory scrutiny over crypto derivatives threatens to cap upside enthusiasm just as momentum builds.

The Chain Sickle Cuts Both Ways

The binary risk is stark. Short-term downside risk outweighs upside potential—the correction could be swift if momentum breaks. The critical support zone lies at 3850; hold above it and corrections stay contained within 10%. Breach 3700, however, and algorithmic stops may trigger a waterfall collapse reminiscent of last year’s dark days.

Navigation Strategy

For short-term traders: gradually book profits in the 4100-4200 band, keeping 30% powder dry on the sidelines. For long-term accumulators: patiently build positions during dips toward 3500-3600, targeting Layer2 ecosystem leaders for asymmetric upside.

The market always thrives amid divergence; it is in moments of panic and greed that genuine opportunities emerge. This window—the next 72 hours—will determine whether Ethereum carves a new bull trajectory or succumbs to the chain sickle’s edge once more.